Alibaba CEO to assume control of domestic e-commerce business

Alibaba (BABA) has announced CEO Eddie Wu will take direct control of the company's core domestic online shopping business. The move comes as the company faces increasing pressure from rivals such as PDD Holdings (PDD).

Yahoo Finance's Brad Smith and Josh Schafer break down the details.

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Video transcript

BRAD SMITH: We're watching shares of Alibaba today after announcing further changes. The company's CEO, Eddie Wu, will now head to its e-commerce business as it seeks to find growth drivers amid increased competition from rivals like Pinduoduo. You're taking a look at shares, up by about 1/10 of a percent here this morning.

JOSH SCHAFER: Yeah, and you saw Alibaba actually close up about 2% yesterday, right, really taking a little bit of a move higher on this. And I think that's when you zoom out and you look at Alibaba shares over the year. The year-to-date stock down about 20% and really sort of looking for some kind of new catalyst.

You mentioned Pinduoduo, Brad. That's a company that's been growing sales, right, and growing online sales, growing online sales significantly. Essentially people feel like maybe taking market share from a BABA. And then we're mentioning Pinduoduo who's public. You could also mention companies that aren't public, right? Think about Shein over in Asia, growing tremendously. Obviously a company that might be coming to market soon. Even Temu a pretty big retail company, also growing.

And so I think you're just seeing perhaps investors maybe a little bit happy to see the company saying, OK, something needs to change here. Let's put someone different in charge, see if we can spark something different. And also going to be in charge of that cloud unit, which includes AI, and we know you've got to do something in AI.

BRAD SMITH: Well, 100%. You've got a call out from Jefferies this morning, which has a buy rating on the stock, that said BABA announcing group CEO Eddie Wu to take charge as CEO of TTG. Expecting the leadership from Eddie to further unlock synergies and drive AI innovations. That was basically half of the headline that they put on the note as well.

So at the end of the day, you've got some bullish sentiments that is prevailing here, at least as of right now, for Alibaba from some of the analysts covering the name.

JOSH SCHAFER: Absolutely.